The Ministry of Finance of Indonesia last year requested UNCTAD to provide support in strengthening the country's capacities in debt management against a backdrop of rising central government debt levels -- increasing from USD 120 billion at the beginning of the decade to USD 170 billion at the end of 2009 -- although the debt ratios are still within conventional sustainable limits.
A project document was signed in December last year between Indonesia's Directorate General of Debt Management, SECO (State Secretariat for Economic Affairs) of Switzerland and UNCTAD for a project budgeted at USD 1,159,311 spanning 42 months. Funding is provided by SECO with the Government of Indonesia to contribute an additional amount of approximately 20 per cent of the budget in terms of maintenance fees and in-kind contributions.
The purpose of the project is to strengthen public debt management in Indonesia through enhancing its reporting and analytical capabilities, upgrading DMFAS (Debt Management and Financial Analysis System) installations in the Ministry of Finance, strengthening the related IT capacities and linkages with other application systems, and delivery of targeted training to its debt managers.
Although significant progress has been made by the Government of Indonesia in the management of public debt, the Government is requesting additional support from UNCTAD in five key areas:
Extension of the coverage to public sector debt and on-lent loans
Improvement of transparency and statistical publications
Strengthening of the debt analysis function
Integration of the DMFAS with other financial management systems
Strengthening of IT capacities and training of staff
Implementation of the project is now well underway.
In January this year, UNCTAD project mananger Balliram Baball undertook a mission to Jakarta to elaborate detailed work plans with the government for project implementation. In February, an UNCTAD mission went to provide IT support for the implementation of the latest DMFAS software, version 6, in the Directorate General of Debt Management of the Ministry of Finance. In May, an UNCTAD mission was dispatched to establish the baselines for monitoring and evaluating the project, in coordination with the government and the local donor (SECO) office. This month, an Indonesian government mission of 5 officials came to UNCTAD's office in Geneva for additional training and to finalise the conversion of the Government securities debt database which is being consolidated into DMFAS 6.0.
The debt management software developed by UNCTAD's DMFAS programme is currently being utilized by 93 institutions in 57 countries worldwide.